19/01/2018 |

Russia sharply increased non-primary exports


The growth rates of Russia’s non-primary exports in 2017 reached a record level over the past ten years and amounted to 19%. This figure was voiced by the head of the Ministry of Industry and Trade of Russia Denis Manturov in the framework of the Gaidar forum. The Minister stressed that Western sanctions allowed the enterprises to refurbish the production of new products and increase the volume of supplies abroad.

“Sanctions to a certain extent affected the decline in trade between Russia and the West for a certain period of time, but this gave a serious impetus to our enterprises, which actively began to develop new projects, launching new samples of industrial products.” We see results – an increase in exports, , not energy, for the past year amounted to about 19%, “- said Denis Manturov. “We expect to maintain a moderate growth in exports for subsequent years, given that new samples of industrial products will be released,” the minister added.

The growth in exports of non-primary products was caused not only by the ruble depreciation that occurred in 2016, but also by the reorientation of many Russian companies to foreign consumers, caused both by the policy of import substitution and support for exports by the state, says Andrei Sinergia, Center for Economic Research Koptelov. Many foreign companies began to produce products on the territory of Russia and export it abroad, which is associated with a decrease in the average level of wages to a level comparable to the labor force in China.

The agro-industrial complex, machine building and chemical industry have become growth drivers for the last year, while analyzing the regional profile, 8% is provided by Kazakhstan, 8% by China, 7% by Belarus, and 6% by the USA. Despite the fact that 30% of non-primary exports are metal products, 20% are provided by the chemical industry, 18% by machine-building products, and 14% by food, Russia still delivers products that do not require high technology for production, which does not allow Serious profits for exporters and often requires state support.

Taking into account the state measures announced in 2018 to support non-primary exports, its growth will continue, Andrei Koptelov is sure, but the dynamics of growth will not be so impressive, as the free niches for Russian products remain less. In 2018, according to the expert, the most likely growth is the export of defense products, food and some types of machinery. And although fuel and energy products today account for almost 70% of the commodity structure of exports, the growth of exports of non-primary products, proves that Russia has risen to start to get off the oil needle.

The problem is, says managing partner of Veta expert group Ilya Zharskiy, that such figures are very easy to manipulate. There are different counting methodologies that differ in different ways from what to attribute to non-primary exports: there are three large sections, in the bottom there are wheat, aluminum, nickel, cast iron, lumber, steel semi-finished products, frozen fish. “Can this be considered” not raw materials “- for me this is a big question,” the expert notes.

The second section of the “non-raw” export is steel pipes, synthetic rubber, sunflower oil, newsprint, he continues. These are like goods, and even non-raw materials, but the share of added value in them is very low, and, to be honest, they are also very close to raw materials. And all this falls into the statistics, which vigorously reports on the growth of this export. Of the approximately $ 600 billion in foreign trade, computers, for example, account for only about $ 0.4 billion, or 0.06%. We have really exported more cars, Ilya Zharsky admits, about 100,000 pieces per year, mostly Skoda Yeti and Lada, but they occupy about 0.1% in the foreign trade turnover.

The head of the Ministry of Industry and Trade does not accidentally make this statement in January – this is the seasonally best month for exports, and last year at that time it showed the highest rates of growth, Ilya Zharsky believes. And given how the economy fell in 2014-2015, any, even the smallest growth due to the low base effect turns into a real statistical “breakthrough”. So, the analyst concludes, the successes of our non-primary exports will remain statistical, showing an increase of 15-30% per year, until labor productivity grows and until our non-commodity goods become a symbol of quality in world markets.

Author: Anna Koroleva

Article in Russian: Expert

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